Trade war on soap between Jamaica and Dominica takes a legal turn
Two Jamaican Government agencies, their bosses and local soap manufacturer Blue Power suedSunday, June 13, 2021
The trade war between Jamaica and Dominica over soap has intensified with the battle now reaching in the Jamaican courts.
Two agencies of the Jamaican Government, the Trade Board and the Jamaica Customs Agency, and their bosses the Trade Administrator and the Commissioner of Customs and Excise as well as local soap manufacturer Blue Power Group have all been sued in Jamaica by Dominican soap manufacturer DCP- Successors Limited.
The suit is the latest in a series of manoeuverings by DCP Successors and the Dominican Government to get a level playing field regarding competition in the soap marketing within Caricom, accusing Jamaica and Blue Power of uncompetitive practices.
DCP-Successor manufactures soap and exports all across the region and is regarded as the preeminent manufacturer of soaps in Dominica, providing its produce to cruise lines and leading hotel chains. The company has also produces global brands under contract, including Palmolive, Protex, Jergens, Dial, Tone, Imperial Leather, to name a few.
In firing the latest salvo in this raging trade war, DCP has gone to the Jamaican court seeking redress by way of restraining and directing orders, having earlier gone to Caricom's Council for Trade and Economic Development (COTED), which late last year issued an adverse ruling on Jamaican-manufactured soaps.
COTED ruled that Jamaica, through its trade board, should not issue any certificates of origin for soaps manufactured under the current manufacturing process in the island.
Court orders being sought by DCP for trade redress
Lack of a certificate of origin from Jamaica may require an importer in a Caricom country to pay a tariff on imported Jamaican soap. still dissatisfied with the situation after this ruling, DCP- Successor petitioned the Jamaican Supreme Court on June 8, 2021 seeking, “an order to restrain Jamaica's Trade Administrator and Trade Board from issuing certificates of origin to local soap manufacturers in respect of soap produced from pellets/noodles imported from outside of Caricom.”
Soap pellets/noodles are a key bulk ingredient used in the production of bath and laundry soaps.
The Dominican company is also seeking an order directing, “the Jamaican Commissioner of Customs and Excise and the Jamaican Customs Agency to apply a Common External Tariff of 40 per cent on all bulk noodles/pellets (from outside of Caricom) imported by Blue Power and other Jamaican soap manufacturers.”
In addition to these orders, DCP- Successor is also seeking to, “obtain from the Caribbean Court of Justice an advisory opinion on (a) the applicability of a Common External Tariff of 40 per cent to be imposed on imports from outside of Caricom of noodles/pellets used in the production of soap in Jamaica and (b) the validity of certificates of origin issued by the Jamaican Government in connection with bath and laundry soap produced in Jamaica with imported noodles/pellets.”
Blue Power responds
In its response to the lawsuit and ongoing trade war between Jamaica and Dominica on soap, Blue Power Group (BPG) says it has been engaged in the manufacture of bar soap in Jamaica for over 20 years and is satisfied that it has done so in full compliance with the legal and policy framework applicable in Jamaica.
“BPG has engaged the services of an attorney and is in discussions with the Government of Jamaica regarding the claim and their proposed policy response. During the legal process, BPG expects to continue to manufacture soap for the Jamaican and non-Caricom markets in the ordinary course,” the company reported in a statement released to the Jamaica Stock Exchange, where its shares are traded.
Dominica's prime minister adds his voice to trade impasse
Dominican Prime Minister Dr Roosevelt Skerrit recently added his voice to the trade dispute while speaking about the challenges faced by his country's biggest soap manufacturer, DCP-Successor, largely because of what he was quoted as saying are “unfair trading practices, which have been promoted in Jamaica”. He was speaking in February during a tour across all DCP-Successor's factory, including the manufacturing and storage units.
Pointing out that Dominica and Jamaica share very good relations, Skerrit is adamant about the promotion of fair trading practices, noting that the company also makes “soap chips” that are exported to Jamaica. Soap is the major export item for Dominica and generates extensive investment for the country to keep the economy afloat, while the DCP- Successor is a massive entity that employs several locals of the country.
The Dominican prime minister highlighted that the factory at DCP-Successor was closed down due to the massive hurricanes but is now under a new administration and is owned by a local Dominican.
“They have made tremendous progress thus far, notwithstanding the challenges faced largely because of unfair trading practices which have been promoted in Jamaica,” Skerrit explained.
He said the soaps being manufactured in Dominica are genuine Caricom soaps, with all of the production elements being carried out within Dominica. The prime minister acknowledged the role of DCP-Successor in the employment sector of the country, stating that all the different units of the manufacturing of soaps have employed local Dominicans, keeping many families operating.
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